Newcastle Minerals Ltd A.NCM

P/NAV - room for more upside in gold stocks

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Credit Suisse: P/NAV suggests room for more upside in gold-mining stocks

 

(Kitco News) - Credit Suisse sees more room for upside in gold-mining stocks based on the ratio of stock prices to net asset value (P/NAV), as well as an expectation that gold prices will rise some more.

Valuation multiples are still below where they were in the last bull cycle for the gold market, Credit Suisse said.

“This trend is more pronounced for mid-cap/intermediate gold stocks, as large-cap/senior gold stocks have re-rated more quickly with generalist inflow,” the bank said.

For companies that Credit Suisse covers in North America, the average P/NAV is currently around 1.80 times, compared to around 2.25 during the previous peak. Average P/NAV for intermediate gold producers, with annual gold production below 1 million ounces, is currently around 1.19 times, compared to around 2.34 during the previous peak. Average P/NAV for senior gold producers, who exceed 1 million ounces a year, is currently around 2.11, compared to 2.31 during the previous peak, Credit Suisse reported.
https://www.kitco.com/news/2020-05-28/Credit-Suisse-P-NAV-suggests-room-for-more-upside-in-gold-mining-stocks.html